Hub Group Earnings: Intermodal Still Navigating Trucking Sector Competition

Hub Group's consolidated top line fell 13% year over year (excluding fuel) and missed our expected run rate for the flagship intermodal division. We figured intermodal revenue would decline again this quarter on lingering weakness in freight demand and pricing (including abundant truckload market capacity), but we expected greater signs of improvement in retailer inventory restocking, which would benefit volumes. Logistics-segment revenue was up slightly because of the Forward Air Final Mile tuck-in acquisition, which masked ongoing weakness in truck brokerage pricing conditions.